Study: E-Commerce To Top $1 Trillion in 2002

By the end of 2002, more than 600 million people worldwide will have
access to the Web, and they will spend more than US$1
trillion shopping online, according to a study by research firm IDC.

"Once people get over the security and
privacy hiccups, as well as other problems that are
not directly related to e-commerce, and have access to
wider product offerings, e-commerce will become as
widespread as offline commerce," Carol Glasheen,
program vice president of IDC's Global Research
Organization, told the E-Commerce Times.

U.S. in Lead

Residents of the United States do more shopping online than those of any other
country, according to the study, but the United States' slice of the pie will
shrink. "The U.S. is a more mature market, so it saw a lot of its fast growth earlier,"
Glasheen said.

The United States now accounts for 40 percent of all money spent
online, but that number will drop to about 38 percent
by 2006 as Asia and Western Europe increase their
online spending, according to IDC.

Gaining Ground

In Asia, a smaller percentage of the population is
buying online, but the sheer number of people in the
region is driving growth of about 89 percent, IDC said.

E-commerce in Western Europe is expected to rise 68
percent, partly as a result of the new common currency,
which brings better competition, price transparency
and improved deals for online buyers.

Other regions of the world are "more in the 40 percent range," Glasheen said.

Online shopping is showing its slowest growth in
Japan, Latin America and Eastern Europe. "Japan jumped
on early, but growth has flattened out as it has
struggled with economic problems," she added.

In the United States, 80 percent of the population will use the
Web at least once a month by 2006, IDC predicted. In
Canada, Web use will grow by 80 percent, with more than half
of Internet users shopping online. "Canada is a little
bit behind the U.S.," Glasheen said.

B2B Rules

Business-to-business (B2B) makes up by far the largest share of
Web sales. One reason why the United States is currently ahead of the
game is that B2B is catching on internationally
somewhat later than it did in the United States, according to Glasheen.

B2B will account for 83 percent of online sales in
2002 and 88 percent in 2006, according to the
IDC study. "That's not to say B2C is not growing fast," Glasheen noted.
"It is -- it's just a smaller slice of the pie."

The majority of B2B sales consists of volume purchasing, meaning that
companies are spending huge amounts of money online.
Consumer buyers are numerous, but they are spending
fewer dollars on average.